Olympus Corp. will have to clear several hurdles to avoid being delisted, which would seriously constrain its means of financing and limit its options for making a quick turnaround.
The Tokyo Stock Exchange moved Olympus' stock to a monitoring post on Nov. 10 to warn investors that the company, suspected of concealing massive losses for about two decades, may be delisted.
Olympus will be delisted if it fails to submit its earnings report for the July-September period to the Financial Services Agency by Dec. 14.
The original deadline under the Financial Instruments and Exchange Law was Nov. 14, 45 days after the company closed its books for the quarter.
Olympus, which planned to release financial results on Nov. 8, postponed the announcement on Nov. 10 to clarify details of the inappropriate transactions.
Olympus executives said they hope to meet the new deadline after a third-party committee formed on Nov. 1 completes its investigations in time.
Tsuyoshi Kikukawa, former Olympus chairman and president, has admitted his involvement during questioning by members of the third-party committee.
Kikukawa, who stepped down on Oct. 26, said losses were concealed for many years and huge spending related to past acquisitions was used to make up for the losses, sources said.
Former Executive Vice President Hisashi Mori and Standing Corporate Auditor Hideo Yamada have already admitted their involvement.
But meeting the Dec. 14 deadline alone will not keep Olympus listed.
If the third-party panel finds grave false entries in past financial statements, its stock will be sent back to a monitoring post.
Olympus will be removed from the TSE after a one-month notification period if the bourse concludes that those entries strongly influenced investors' decisions.
Screening standards are not necessarily clear, however.
TSE guidelines only say the exchange will look into the content, background, reasons for and other details of falsifications in a comprehensive manner.
If Olympus is delisted, the company cannot raise funds by issuing new stock on the market. It will also become difficult to secure bank loans with its lost credibility.
Relisting will generally take several years because the same screening standards for unlisted companies will apply.
Kanebo Ltd., a cosmetics maker delisted in 2005 after concealing that it had a negative net worth for nine consecutive years, eventually sought assistance from the government-backed Industrial Revitalization Corp.
Seibu Railway Co., which was delisted in 2004 after falsifying ownership of Kokudo Corp. and other major shareholders for more than 40 years, accepted top executives from Mizuho Financial Group to help rebuild the railway company.
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